Historical nominal returns for Coca-Cola have been 8% and -20%. The nominal returns for the market index S&P500 over the same periods were -15% and 28%. Calculate the beta for Coca-cola. b) Assume that using the Security Market Line (SML) the required rate of return (RA) on stock A is found to be half of the required return (RB) on stock B. The risk-free rate (Rf) is one-fourth of the required return on A. Return on market portfolio is denoted by RM. Find the ratio of beta of A (βA) to beta of B (βB)
Required-
Could you answer both of these questions in detail, as I have previously sent these questions, I have got the answers but I dont understand how and where the numbers have come from
as for example for part A you multiplied the Second equation by -1 why?
for part B the steps were not detailed enough to understand what had been done
a) ) Historical nominal returns for Coca-Cola have been 8% and -20%. The nominal returns for the market index S&P500 over the same periods were -15% and 28%. Calculate the beta for Coca-cola.
b) Assume that using the Security Market Line (SML) the required
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